Why it's going to get even harder to buy a house in Britain

If you're looking to buy a house in Britain, the near future, you
might want to get a move on. Prices in the UK are on the cusp of
soaring again.

The record low number of properties for sale has
coincided with rising demand, according to a note from Barclays.
This will potentially double the rate at which prices rise in the
next six months.

Here are the main points:

Surveyors are reporting
less stock.According to the Royal Institution of
Chartered Surveyors, 22% more of its surveyors saw supply to
the market fall in July.

Buyer enquiries are
rising.This supply
shortage comes at a time when buyer enquiries have risen for
the fourth consecutive month, with 25% of respondents reporting
an increase in demand.

House price inflation has
been around 4% in the past six months, which implies
that prices could rise by up to 9% in the next six
months, an acceleration of the current rate of
inflation.

If you think house prices are
high now, bear in mind they're still below their peak:

Barclays

The data on price inflation
comes from the RICS survey, which canvasses opinion on where
house prices are going in the next six months.

Here's the chart from
Barclays:Barclays

While it might be bad news for first-time buyers, it's great for
the house builders. Barclays estimates every 1% increase in house
price inflation adds around 1% on to profit margins at building
companies.

There is a question of how long something like this can be
sustained, especially in London where house prices to earnings
are already at their highest level in more than 30 years.